New Zealand is considering new financial conduct legislation. The ‘Financial Markets (Conduct of Institutions) Amendment Bill‘ seeks to ensure that financial products are designed with customer outcomes in mind. 
Recent culture and conduct reviews by the FMA (Financial Markets Authority) and RBNZ (Reserve Bank of New Zealand) found that target-based sales incentives were leading to bad conduct in the sector. 

 According to Regulation Asia, the bill will, therefore, require institutions to:

establish, implement and maintain an effective fair conduct program, including effective policies, processes, systems and controls to ensure that legal obligations to consumers are met;

ensure that the fair conduct program is available for public inspection, is regularly reviewed, and that deficiencies are identified and remedied;

ensure employees, agents, intermediaries and distributors comply with the fair conduct program.

Findings from Australia’s Hayne Royal Commission have triggered closer attention to conduct risk issues among regulators worldwide, and prudential policies such as those introduced in New Zealand are fast becoming a “new normal” for the sector.  

Given a related proliferation of individual accountability regimes now in place in many markets, bank executives will need to implement proactively-oriented risk management capabilities if they are to avoid individual liability for conduct risk management failures.